Honda in Europe

The Honda Motor Company first entered the European market in the early 1960s through the sale of its motorcycles. The company’s motor vehicles were introduced into Europe at a much later date. Honda’s motor vehicle sales in Europe have been relatively poor, especially in the previous five years. Despite its huge success in the North American market, Honda is struggling to gain a significant foothold in the European market. Honda executives wonder why their global strategy is sputtering. Is global strategy just a pipedream, or is something wrong with Honda's European strategy?

History of HondaIn 1946 Souichiro Honda founded the Honda Technology Institute. The company started as a motorcycle producer and by the 1950s had become extremely successful in Japan. In 1956, Honda entered the US market and was able to position itself effectively, selling small sized motorcycles. In the early 1960s, the company commenced automobile manufacturing and participated in Formula-1 racing (F-1) to assist its technology development. Thanks mainly to its F-1 efforts, Honda became recognized, not only in Japan but in the rest of the world as well, as a technological savvy company. Up to the early 1990s the company had experienced serious organizational mismanagement resulting from tension between the technology side and the marketing-sales side. The situation became so dire, that the technology biased president and founder, Souichiro Honda, was forced out, due to his neglect in important marketing decisions. After Souichiro Honda’s departure, the company became more marketing-technology balanced, and by 1999 was second in sales only to Toyota in the Japanese market. The underlying success of the company is best summarized in its mission statement, “pleasure in buying, selling and producing”, and “Beat GM, not Toyota”. Honda currently has 25 separate factories in the world, and its operations cover automobiles, motorcycles, financial services, power products and power tools. In the fiscal year 2001, 81% of Honda’s revenues came from its automobile sector, as outlined in the table below.

Automobile industryThe automobile industry worldwide is in the mature stage of its life cycle. By the 1990s, an oversupply of motor vehicles became such a problem to the industry that a number of mergers and acquisitions (M&A) and alliances took place. Industry experts stated in the late 1990s, only 6 or 7 companies would remain global players while other companies will be forced to sell in niche markets. In the last decade DaimlerChrysler acquired a major share of Mitsubishi, GM became the controlling shareholder of Fiat and Saab, Ford acquired Volvo, Jaguar, and a major share of Mazda; and Renault became the controlling shareholder of Nissan. Global scale production and sales became important as a way to cutting cost through developing common platform or engines as well as global procurement. Unlike their European and American counterparts, Japanese automobile companies, including Honda, did not adopt the M&A strategy for expansion. To remain as a global competitor, Honda instead expanded its operations by setting up plants in regional markets. The table below shows that Honda is currently ‘the number 7-car company’ in the world.

Honda in EuropeCurrently Honda has five global operations, North America, South America, Japan, Asia-Oceania, and Europe. The European operation covers Europe, the Middle East, and Africa. Honda entered the European market in 1961 as a motorcycle manufacturer, with its automobile operations following several years later. In 1986, Honda started engine production in the UK, and 6 years later it launched its European production at Swindon in Somerset, UK. Honda opened production facilities in Turkey in 1999 to target the Middle East and Eastern European markets. The European operation accounts for a small portion of Honda’s global operation,...

You May Also Find These Documents Helpful

...Honda in Europe
Introduction
The Honda Motor Company first entered the European market in the early 1960s through the sale of motorcycles. Honda’s motor vehicle sales in Europe have been relatively poor, especially in the previous five years. And Honda executives wonder why their global strategy is sputtering.
History of Honda and Automobile Industry
In 1946, Souichiro Honda founded the Honda Technology Institute. The Company started as a motorcycles producer and by the 1950s had become extremely successful in Japan. In 1956, Honda entered the US market and was able to position itself effectively. In the early 1960s, the company commenced automobile manufacturing and participated in Formula F-1 to assist its technology development. Until the early 1990s, the company experienced serious organizational mismanagement resulting from tension between the technology side and the marketing sales side. The automobile industry worldwide is in the mature stage of its life cycle. In the late 1990s, industry experts stated that only six or seven companies would remain global players, while other companies would be forced to sell in niche markets. Unlike their European and American counterparts, Japanese automobile companies, including Honda, did not adopt the M&A strategy for expansion. To remain a global competitor,...

...
Business Summary
Honda Motor Co., Ltd., together with its subsidiaries, engages in the development, manufacture, and distribution of motorcycles, automobiles, and power products primarily in North America, Europe, and Asia. Its motorcycle line consists of business and commuter models, as well as sports models, including trial and motor-cross racing; all terrain vehicles; personal watercrafts; and multi utility vehicles. The company also produces various automobile products, including passenger cars, minivans, multi-wagons, sport utility vehicles, and mini cars; and power products comprising tillers, portable generators, general-purpose engines, grass cutters, outboard marine engines, water pumps, snow throwers, power carriers, power sprayers, lawn mowers and lawn tractors, home-use cogeneration units, thin film solar cells home use, and public and industrial uses. In addition, it sells spare parts and provides after sales services are through retail dealers, as well as involves in retail lending, leasing to customers, and other financial services, such as wholesale financing to dealers. The company was founded in 1946 and is based in Tokyo, Japan
CONTENTS
1. Introduction
2. Company Profile
3. Importance & Scope
4. Research Objectives
5. Hypothesis
6. Research Methodology
7. Data Analysis
8. Findings
9. Suggestions
10. Limitations
11. Bibliography
12. Annexure
INTRODUCTION
INTRODUCTION...

...﻿COMPANY REPORTS
Introduction
Soichiro Honda was born on November 17, 1906, in Hamamatsu, Shizuoka, Japan. He was a racer, a businessman, and a manufacturer. He dreamed of a better way of making piston rings, founded a small company, and began production.
He was also a Japanese engineer and industrialist, and founder of Honda Motor Company, Ltd, which is a Japanese multinational corporation primarily know as a manufacturer of automobiles and motorcycles.
Headquartered in Japan, Honda Motor Company is one of the major producers of quality motor vehicles around the world. Honda Motor Company is by far the world’s biggest motorcycle maker since 1959.
Honda's quality, innovation and reliability have made it one of the most sought after car brands in the world. It's major car models such as Accord have occupied the leadership position in global sales for years now.
Honda cars are also renowned for their fuel efficiency and have a loyal customer following all around the world. Honda's leadership position is sustained due to its enormous focus on R&D, quality and innovation.
Along with Toyota, its major competitor, Honda has ruled the US markets with its successful models and captured market share of American manufacturers such as GM and Ford.
This success turned Honda’s focus to another dream, the American Dream, and the company also moved away from other companies who...

...The Honda Motor Company Limited was founded by Soichiro Honda in the late 1940s. Mr Soichiro Honda was born in Shizuoko, Japan on the 17th of November in 1906. During those early years, Soichiro Honda spends most of his childhood days helping his father to repair bicycles in a small town called Komyo. (St. Catherine Standard, 2009) His family was not wealthy. To be more precise, his mother was a weaver and his father was a local blacksmith. In spite of this, young Honda was always cheerful and shown great determination in the development of new technology. Inheriting his father’s hard work ethic and interest in mechanical things, young Honda eventually established an automobile company that transform the country’s reputation for inventing and producing some of the world’s finest and most reliable automobiles. Clearly, there’s no need an introduction for this man as he was dubbed as the ‘Japanese Henry Ford’. (St. Catherine Standard, 2009)
To begin with, Honda is one of the world’s largest automobile manufacturers and it is overtaking the Malaysian automobile market by storm. The Honda Motor Company was firstly introduced to the Malaysian market back in 15th November 2001. (Honda) The birth of Honda Malaysia Sendirian Berhad was a result of partnerships between DRB-HICOM Berhad, the Honda Motor Company Limited of Japan...

...MARKETING MANAGEMENT
“National College Of business &amp; Administration”
Submitted to: Mr. Sajjad Hussain
Submitted by: Zohaib Ahmed Chaudhry
Registration #: 2131180
Project on HONDA ATLAS CARS, PAKSITAN LIMITED
MISSION STATEMENT
“We see the world not as it is, but as it could be.”
History
Honda Atlas Cars Pakistan Limited is a joint venture between Honda Motor Company Limited Japan, and the Atlas Group of Companies, Pakistan. The company was incorporated on November, 1992 and joint venture agreement was signed on August, 1993. The ground breaking ceremony was held on April 17, 1993 and within a record time of 11 months, construction and erection of machinery was completed. The first car rolled off the assembly line on May 26, 1994. Official inauguration was done by President of Pakistan, Sardar Farooq Ahmad Khan Leghari. Mr.Kawamoto, President of Honda Motor Company Limited Japan was also present to grace the occasion. The company is listed on Karachi, Lahore and Islamabad Stock Exchanges.
Introduction
Honda Atlas Cars Pakistan Limited is a joint venture between Honda Motor Company Limited Japan, and the Atlas Group of Companies, Pakistan. The company was incorporated in 1992 and joint venture agreement was signed in 1993. The ground breaking ceremony was held on April 17, 1993 and within a record time of 11 months, construction and erection of machinery was...

...Honda (A) Case Analysis
Submitted By:
GROUP 11 | SECTION 2
Rachit Bhatnagar
|DM 15244
Sarvagya Nayak
|DM 15250
Seerat Ghuman
|DM 15251
Vaibhav Agnihotri
|DM 15262
Keerthi P.
|DM 15267
Case Background
• Success factors for Honda:
– 1950:
• Offered a multiproduct line
• Leadership in product innovation
• Exploited opportunities for economies of mass production
– 1958: Market researched revealed an untapped market for small motorcycles to
be used for local deliveries
– 1959: Entered US market and set up American Honda Motor Company
– 1961: Huge advertising spend to change the image of motorcycles “You meet
the nicest people on a Honda” U.S. sales rose from $500,000 in 1960 to $77
million in 1965
– Largest dealership network in US
– Heavy commitment to R&D and manufacturing techniques
US Market
• US competitors:
– Sears, BSA Ltd, Harley Davidson
– Believed that motor cycle market was not for light weight vehicles, and was more suitable for
sports rather than transportation
• Honda’s US entrant: small lightweight motorcycles (51-125 cc)
• Sold at a very high premium compared to the price of same products in the domestic
market:
– For CB750, the US price to distributor was $1373 whereas the Japanese equivalent was $986. Even
after taking into consideration the packing and freight charges, the prescribed price is $1149.
– Thus, it was selling at a 20% premium
• By 1974 Honda had reached a...

...success in the US.
Firstly, Honda has a deliberate strategy with a clear goal that to achieve a big market share in the American market. It is said that Honda’s primary objectives are keeping the sales volume rather than short-term profitability. The essence of this strategy is to make the sales volume grows faster than competitors. Therefore, Honda could increase his market share. Besides, Honda set their price for his market share target. They may lower the price to achieve the target if they need to do so.
Secondly, Honda has a comprehensive sales plan. Honda chooses the middle-class as his target customers, and chooses to sell beginning from the West Coast and moving eastward. Different from American and European companies in the US, Honda provides a kind of lightweight motorcycles with three-speed transmission, an automatic clutch, five horsepower, an electric starter, and a step-through frame. Compare with other motorcycles, his model is lighter, faster, easier to drive, especially for women. Besides, it is less than $250 in retail, which is much cheaper than others (Christiansen & Pascale, 2011). Some people don’t believe the lightweight market has a big potential of profit, but Honda believes that motorcycles could be sports vehicles rather than transportation vehicles. It grabs the special needs of customers, and provides the products they want.
Thirdly,...